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Local Banks Average 9% YTD Total Return

Since its establishment as a trading port in the 19th century, Singapore has been a magnet for financing activities. Historically, the island was home to many small banks that provided ways for Chinese merchants to remit funds back to the mainland.

By the beginning of the 21st century, this collection of banks, through successive waves of mergers and acquisitions, had been consolidated into three locally-listed banks: DBS Group Holdings (SGX:D05), Oversea-Chinese Banking Corporation (SGX:O39) and United Overseas Bank (SGX:U11). In the context of the 2008 global financial crisis, these three banks are now considered to be among the world’s most resilient institutions.

Over the past three years, the shares of these three banks have averaged a 49.0% total return which included their price performance and dividend payments. They have a total market capitalisation of S$120.0 billion. As detailed in the table below the average annualised total return of the banks over the past three years was 14.1%.

Name SGX Code Market Cap S$ B Px Chg Pct YTD % Total Return 3Y ANN % Total Return 3Y % Total Return 12M % Total Return YTD % Dvd Ind Yld %
DBS GROUP HOLDINGS D05 45.3 8.1 18.4 66.0 14.2 11.7 3.1
OVERSEA-CHINESE BANKING CORP O39 38.6 -0.2 9.9 32.8 1.3 3.3 3.4
UNITED OVERSEAS BANK U11 36.0 8.3 14.0 48.1 14.2 12.1 3.0

Source: Bloomberg (Data as of 31 October 2014)

DBS Group Holdings

Before trading on Friday, DBS Group Holdings reported a net profit of S$1.01 billion for the third quarter ending 30 September. This was an increase of 17% from a year ago. Capital ratios for DBS Group Holdings were Common Equity Tier 1 at 13.4%, Tier 1 at 13.4% and total adequacy ratio at 15.6%. The stock last went ex-dividend on 13 August, distributing S$0.28 per share in dividends.

DBS Group Holdings is a financial services group with business presence in regions including Greater China, Southeast Asia and South Asia. DBS Group Holdings is also a provider of services in consumer, SME and corporate banking activities. DBS Group Holdings has a market capitalisation of S$45.3 billion and generated 2014 year-to-date total return of 11.7%.

Oversea-Chinese Banking Corporation

Before trading on Thursday, OCBC reported a net profit after tax of S$1.23 billion for the third quarter of 2014 ending 30 September. This was an increase of 62% from S$759 million a year ago. As of the 30 September, OCBC’s capital ratios were maintained as followed: the Common Equity Tier 1 capital adequacy ratio was 13.2% and Tier 1 capital adequacy ratio and Total capital adequacy ratio were 13.2% and 15.5% respectively. The stock last went ex-dividend on 25 August, distributing S$0.18 per share in dividends.

OCBC is a Singapore bank formed in 1932 and is a provider of specialist financial and wealth management services. The company has key markets in Singapore, Malaysia, Indonesia and Greater China. OCBC has a market capitalisation of S$38.6 billion and maintained 2014 year-to-date total return of 3.3%.

United Overseas Bank

On Thursday after the market closed, UOB reported net earnings of S$2.46 billion for the first nine months of 2014 ending 30 September. This was an increase of 10.2% from the previous corresponding nine months of 2013. The Group’s Common Equity Tier 1, Tier 1 and Total Capital Adequacy Ratios were at 14.0%, 14.0% and 17.0% respectively as of 30 September. The stock last went ex-dividend on 18 August, distributing S$0.2 per share in dividends.

UOB is a bank that was incorporated in 1935 and has operations in countries including China, Indonesia, Malaysia, the Philippines, Singapore and Thailand. UOB has a market capitalisation of S$36.0 billion with 2014 year-to-date total return of 12.1%.  Click here now for your FREE subscription to Take Stock Singapore, The Motley Fool’s free investing newsletter. Written by David KuoTake Stock Singapore tells you exactly what’s happening in today’s markets, and shows how you can GROW your wealth in the years ahead.

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